Ether ETFs: Keyrock’s Crypto Kaleidoscope

According to the CEO of Keyrock, Kevin de Patoul, the approval of spot Ether exchange-traded funds (ETFs) is not a guaranteed outcome. While de Patoul believes there is a high likelihood of Ether ETFs being accepted, he also acknowledges that it is not a “done deal.” The discussion surrounding Ether ETFs has gained attention in the cryptocurrency industry following Bernstein’s suggestion that Ether may be the only other cryptocurrency to receive an ETF this year. Bernstein predicts a 50% chance of Ether ETFs being accepted by May 2024, while JPMorgan and Bloomberg’s senior ETF analyst offer similar probabilities of approval.

De Patoul anticipates challenges similar to those faced in getting the first spot Bitcoin ETFs approved in the United States. One of the primary concerns is whether the Securities and Exchange Commission (SEC) Chairman, Gary Gensler, will classify Ether as a security. Gensler has refused to give a clear answer on this matter in past congressional hearings, despite a former SEC Division Director rejecting the idea in a 2018 speech. De Patoul believes that Ether does not qualify as a security but acknowledges that the introduction of staking yield after Ethereum’s merge to a proof-of-stake consensus model may change the SEC’s perspective.

Interest in Ether ETFs has been revived due to Ether surpassing the $3,000 price level for the first time in 22 months. De Patoul attributes Ether’s recent price increase to the excitement surrounding a potential spot ETF and the upcoming Dencun upgrade. The Dencun upgrade is expected to enhance the Ethereum network’s scalability, reduce gas fees, and add value to Ethereum, resulting in a positive price impact. The decision on Ether ETFs rests with Gary Gensler, who has remained silent on the matter.